Greater AI use by Australian small and medium-sized businesses (SMBs) would boost the Australian economy by as much as A$44 billion, or 1.3 per cent of GDP. Businesses currently at the most basic level of AI adoption would see a 45 per cent jump in profits with just a modest uptick in usage, for example by integrating AI into workflows or providing training opportunities for employees. These are just some of the findings in a new research report by Deloitte Access Economics, commissioned by Amazon Australia.
The research set out to understand the benefits to individual business and the wider economy of increased AI adoption by Australian SMBs, as a means to increase the productivity, growth and competitiveness of Australian SMBs. Based on the research findings, the report outlines specific actions government, industry, and businesses can take to support our AI future.
SMBs are the backbone of the economy, representing 99% of all Australian businesses, employing 66% of Australia’s workforce and contributing more than half the nation’s GDP. They’re at the heart of local communities across the country, from family-run restaurants to single parents with an online side hustle.
But despite their graft and grit, many are struggling. In fact, almost two out of three small businesses fail within their first three years of operation. They’re less productive than large companies and that gap is worse in Australia than many peer countries including Germany, the U.K., and France.
AI can help turn that around, boosting productivity by empowering these businesses and their employees to spend less time on repetitive tasks. By streamlining operations, enhancing customer engagement, and enabling smarter decision-making, they would have more opportunity to innovate, upskill their workforce, and grow their businesses.
“AI represents a transformational opportunity for Australian small and medium businesses” says John O’Mahony, the Deloitte Access Economics Partner who led the report. “By helping close the productivity gap between SMBs and larger firms, it promises to boost both individual business profitability and broader economic growth”
Deloitte surveyed 1,000 Australian SMBs across 19 industries to develop an AI Maturity Index, indicating how prepared businesses are to adopt and utilise AI to the greatest potential, and to identify barriers to greater AI adoption.
A mere 5 per cent of Australian SMBs are fully enabled to reap the benefits of AI, while more than 40 per cent are at only the most basic level of adoption. Just over half are at an intermediate level. An example of a fully AI enabled business is one with an AI strategy embedded in core processes, provides training for employees on the use of AI, and has fully centralised data systems. Deloitte has also developed an interactive online AI Maturity Assessment Tool where SMBs can evaluate their AI readiness based on the AI Maturity Index.
Like a lot of businesses in Australia, Amazon is dependent on the success and growth of many other Australian companies. Today, over 14,000 Australian businesses sell in Amazon stores around the world, many of them SMBs.
“Amazon gives us a customer base that is readily available and in need of protection for their diabetes technology,” the founder of the Australian small business Not Just a Patch Pete Lomas says. “Being a business that operates in multiple regions is not easy, but Amazon’s scale and automation helps our global business, by connecting us with people wearing continuous glucose monitors (CGM’s) who need support and peace of mind.”
Amazon’s Australian store offers customers more than 200 million items across multiple categories. Our ability to offer this vast selection relies on independent Aussie sellers, and it’s why we invest as much as we do to helping Aussie businesses grow and prosper both locally and globally. For example, we’re developing new AI tools to help our independent sellers easily create new product detail pages, and we use AI and machine learning to improve inventory placement and demand forecasting which supports selling partners.
As Deloitte’s research shows, there is huge potential for Australian SMBs to improve their productivity and bottom line through a modest increase in AI adoption. The potential A$44 billion economic boost isn't just a number - it represents real opportunities for Australian entrepreneurs, families, and communities to grow and prosper.
You can read the full report by Deloitte Access Economics here and access the Deloitte AI Maturity Assessment Tool here. Responses submitted to the tool will be subject to Deloitte’s Privacy Statement.
